TPS Eastern Africa to offer 200 million new ordinary shares in Rights Issue

KENYA – TPS Eastern Africa, the owner of Serena Hotels plans to issue 200 million new ordinary shares through a rights issue after its shareholders passed a special resolution during the company’s Annual General Meeting on 28th June 2021.

According to the minutes of the company’s 49th AGM, investors passed the resolution to increase the authorized share capital from the current US$1.85 million to US$3.7 million through the creation of an additional 200 million ordinary shares with a per value of US$0.009 each.

The new ordinary shares will “rank pari passu (equal footing) in all respects with the existing ordinary shares of the company,” said the company.

Serena Hotels, the leading hotel chain in East Africa, posted US$11.12 million net loss for the period that ended on 31st December 2020, the biggest annual loss in the company’s history with the net loss a big shift from US#1.7 million profit after tax posted in December 2019.

Serena’s revenue in 2020 fell to US$18.8 million from US$63.2 million in 2019, a 70% drop, as a result of the disruptions in the hospitality sector and its finance expenses jumped to US$5.4 million at the end of 2020 from US$1.65 million in December 2019.

The company said that it “experienced material cancellations” as a result of the restrictions introduced globally to curb the spread of Covid-19.

Despite the challenges faced in the past year, Serena managed to expand its network of hotels in East Africa with the launch of Goma Serena Hotel in the Democratic Republic of Congo in September 2020.

“The new ordinary shares will “rank pari passu (equal footing) in all respects with the existing ordinary shares of the company”

The hotel chain said that although the business environment remains highly unpredictable, it expects business to pick up in the third and fourth quarter of 2021.

TPS Eastern Africa is the third company listed on the Nairobi Securities Exchange to announce a rights issue in recent months after Crown Paints, and Transcentury Plc.

The companies aim to raise funds to assist in the recovery process after a challenging period linked to the Covid-19 pandemic.

TPS Eastern Africa is yet to disclose additional information on the rights issue such as the date of issue and price of the rights issue.

The hotel chain is optimistic of a recovery in the third and fourth quarters of 2021, given the vaccine rollout around the globe and the slow return to normal activities.

However, the company’s board of directors are bracing for a tough year ahead and therefore do not recommend a dividend for the year 2020.

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